Summary
Manhattan Associates reported record second quarter 2024 results. Revenue reached $265.3 million, up 14.8% from the prior-year quarter. Operating income climbed 35.1% to $68.2 million. Net income rose 33.2% to $52.8 million. Diluted EPS was $0.85, up from $0.63. Operating margin expanded to 25.7% from 21.9%. On a non-GAAP basis, adjusted diluted EPS was $1.18, compared with $0.88. Adjusted operating income was $92.9 million, compared with $68.4 million. Cloud subscription revenue grew 35% and now represents about 96% of total software revenue. The company said demand for its cloud solutions remained solid. CEO Eddie Capel called the quarter another solid period of growth, margin expansion, and cash flow. He added that business fundamentals are solid and that the company enters the second half with a record pipeline.
The quarter also showed strong cash generation and backlog growth. Operating cash flow was $73.3 million, up 80.6% from $40.6 million. Capital expenditures were $2.2 million, up 119.7%. Remaining performance obligations (RPO) stood at $1.6 billion, up 33.3% over June 30, 2023. Deferred revenue was $259.0 million, up 14.0%. Days sales outstanding improved to 66 days from 74 days at March 31, 2024. The company repurchased 342,807 shares for $75.0 million during the quarter. In July 2024, the board replenished the remaining share repurchase authority to $75.0 million. Manhattan Associates has no debt on its balance sheet. Over 98% of RPO represents cloud native subscriptions with non-cancelable terms greater than one year. Maintenance contracts are typically one year and not included in RPO. RPO growth was driven by strong demand for the company's cloud offerings.
For the full year 2024, management raised guidance. Total revenue is now expected between $1,036 million and $1,044 million, representing 12% growth. GAAP operating margin is guided to 22.8% to 23.1%. Adjusted operating margin is guided to 32.0% to 32.2%. GAAP diluted EPS is expected between $3.08 and $3.16, or 9% to 12% growth. Adjusted diluted EPS is guided to $4.22 to $4.30, or 13% to 15% growth. The guidance is for the full fiscal year 2024. Management remains cautious about the global economy but noted a record pipeline entering the second half. The company said it will continue to invest in cloud innovation and strategic operating expenses to support growth. Adjusted operating margin and adjusted EPS exclude the impact of equity-based compensation and related income tax effects.
Operational highlights included strong win rates and a growing cloud mix. International revenue represented approximately 33% of total revenue for the quarter. The company employed about 4,700 people worldwide. Risks remain. Management cited global economic conditions, inflation, disruption in the retail sector, delays in product development, competitive and pricing pressures, software errors, IT failures, security breaches, and global instability including the wars in Ukraine and the Middle East. The MD&A also warned that sales cycles for large cloud subscriptions could be extended. Other risks include competitive exposure to offshore providers, reliance on third-party and open source software, the need to protect intellectual property, and the possible effects of new or increased tariffs. Contractual obligations include approximately $257.6 million for cloud infrastructure over the next six years and $26.7 million for internal software subscriptions. The company expects to fund these commitments from working capital.
First half 2024 results also set records. Revenue for the six months ended June 30, 2024 was $519.9 million, up 15.0%. Operating income was $125.8 million, up 29.0%. Net income was $106.6 million, up 35.9%. Diluted EPS was $1.71, up 36.8%. Operating cash flow for the six months was $128.0 million, up 28.9%. Capital expenditures were $4.5 million, up 170.9%. Operating margin for the first half was 24.2%, up 2.6 percentage points. The company's five strategic goals for the remainder of 2024 include expanding the Manhattan Active Suite of cloud solutions and growing cloud subscription revenue.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2024 | Q1 FY2024 | QoQ | Q2 FY2023 | YoY |
|---|---|---|---|---|---|
| Revenue | $265.3M | $254.6M | +4.2% | $231.0M | +14.8% |
| Gross profit | $145.3M | $135.3M | +7.4% | $122.2M | +18.9% |
| Gross margin | 54.8% | 53.1% | +1.6 pp | 52.9% | +1.9 pp |
| Research & development | $35.3M | $35.0M | +0.9% | $31.6M | +11.8% |
| Sales & marketing | $19.2M | $19.9M | -3.9% | $18.6M | +3.2% |
| General & administrative | $21.1M | $21.2M | -0.4% | $20.2M | +4.3% |
| Total operating expenses | $197.1M | $196.9M | +0.1% | $180.5M | +9.2% |
| Operating income (loss) | $68.2M | $57.6M | +18.3% | $50.5M | +35.1% |
| Operating margin | 25.7% | 22.6% | +3.1 pp | 21.9% | +3.8 pp |
| Net income (loss) | $52.8M | $53.8M | -1.9% | $39.6M | +33.2% |
| Net margin | 19.9% | 21.1% | -1.3 pp | 17.1% | +2.7 pp |
| Diluted EPS | $0.85 | $0.86 | -$0.01 | $0.63 | +$0.22 |
Risks
MD&A states the company remains cautious about the global economy and that global geopolitical and economic volatility likely will continue to shape customers' and prospects' enterprise software buying decisions. It also says current sales cycles for large cloud subscriptions in target markets could be extended, as software is often part of larger capital commitments.
MD&A states cloud revenue now represents about 96% of total software revenue and cloud subscriptions revenue grew 35% in Q2 2024, while software license revenue decreased 18% in Q2 2024 and 35% in the six months ended June 30, 2024. Maintenance revenue is expected to decline as customers convert to cloud, making results increasingly dependent on cloud subscription growth.
MD&A notes approximately 67% of total revenue in both the three and six months ended June 30, 2024 was generated in the United States, 18% in EMEA, and the remainder in APAC, Canada, and Latin America. It cites Gartner that about 78% of every supply chain software solutions dollar invested is spent in North America and Western Europe, so the health of those economies has a meaningful impact.
MD&A describes the Unified Omnichannel Commerce and Digital Supply Chain markets as intensely competitive and characterized by rapid technological change. It says the goal is to grow cloud subscriptions and software license revenues faster than competitors through investment in innovation.
International revenue was approximately $88.8 million and $172.5 million for the three and six months ended June 30, 2024, about 33% of total revenue. MD&A reports net foreign currency losses of $0.6 million in Q2 2024 and $1.1 million in the first six months of 2024, and lists foreign currency exchange risk.
SaaS KPIs
All quarters →RPO Growth (YoY)
Remaining Performance Obligations (RPO)
Cloud Subscriptions Revenue
Cloud Subscriptions Revenue Growth
Summary, forecast, risks and KPIs are extracted from MANHATTAN ASSOCIATES INC's SEC filings for Q2 FY2024 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 1, 2026.